Author Topic: College apartment rental? That'll be $44,400 for the year...  (Read 11504 times)

kendallf

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College apartment rental? That'll be $44,400 for the year...
« on: December 12, 2013, 08:01:36 PM »
My daughter is in her first year of college, and she would like to move into an apartment next year with some other girls.  There are four of them committed, apparently, and the mother of one of the other girls already paid the first month's rent (in October!) for next year's lease, which starts in May.

When I called her she mentioned this and said the 1st month's rent was $720, and I said, "OK, so my daughter's share would be 1/5th of that?"  She said no, that WAS the 1/5th amount.. she sent me the lease agreement and I blew a small gasket.

Total rent for the year?  $44,400.  This is in Lansing, MI; a town with scores of fairly nice houses for sale for less.  Their lease calls for $3600 1st month's rent in October, $3600 security deposit in February, and $11,200 rent due May 5th (occupancy starts).  That's $18,400 before they ever set foot in the apartment.

Needless to say, my daughter will not be a roommate.  I think I need to go buy a house there and go into business myself..

Bigote

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #1 on: December 13, 2013, 03:19:13 AM »
Wow.   And this mother signed the lease without first talking to the parents of the other students?   That could end up being a very expensive mistake.   

kms

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #2 on: December 13, 2013, 04:15:50 AM »
Holy smokes that's ridiculous! I've attended Wayne State in Detroit and my rent was never more than $5,000 a year! As far as I know Lansing should be even cheaper than Detroit, Wayne State is in Midtown and thus a bit on the expensive side in terms of housing.

randymarsh

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #3 on: December 13, 2013, 06:49:15 AM »
This is a somewhat new trend in college housing. At least it's getting more popular apparently.

The reason the rent is so much is because each individual is leasing only their room. These apartments are also often furnished. So the benefit is that if your child's BFF drops out of school or just stops paying, your kid isn't on the hook for the additional rent payment like a typical lease. And of course you have don't have to buy/find any furniture.

Near my school these apartment complexes are pretty new too so you pay a premium for that. High ceilings, new appliances, wood floors, etc.  One I foolishly lived at for 6 months had a bathroom attached to all bedrooms.

rocksinmyhead

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #4 on: December 13, 2013, 07:34:05 AM »
WOW! That's almost what I pay for a 2-bedroom house in Tulsa with a fenced in yard, haha. Truly nutso. It is true that rental markets around big schools can be ridiculous...I don't know anything about Lansing, but I was at Penn State for grad school a couple years ago and most stuff there available to undergrads was overpriced. But THAT is a whole new level of overpriced!!

The $18,400 due before move-in is REALLY bizarre. I think in Minnesota (don't remember about PA or OK) you legally cannot have a deposit exceeding 1 month's rent, and I doubt that you could require more than that just by calling it "prepaid rent" rather than a security deposit... I would think that SOME kind of restriction would be pretty typical. Just, wow. Do you have to pay for this??!?!!

El Gringo

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #5 on: December 13, 2013, 07:44:55 AM »
That's what I pay for a room in DC!

dragoncar

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #6 on: December 13, 2013, 08:05:21 AM »
My daughter is in her first year of college, and she would like to move into an apartment next year with some other girls.  There are four of them committed, apparently, and the mother of one of the other girls already paid the first month's rent (in October!) for next year's lease, which starts in May.

When I called her she mentioned this and said the 1st month's rent was $720, and I said, "OK, so my daughter's share would be 1/5th of that?"  She said no, that WAS the 1/5th amount.. she sent me the lease agreement and I blew a small gasket.

Total rent for the year?  $44,400.  This is in Lansing, MI; a town with scores of fairly nice houses for sale for less.  Their lease calls for $3600 1st month's rent in October, $3600 security deposit in February, and $11,200 rent due May 5th (occupancy starts).  That's $18,400 before they ever set foot in the apartment.

Needless to say, my daughter will not be a roommate.  I think I need to go buy a house there and go into business myself..

If that's the going rate, it sounds like a great option to buy a house and have your daughter do light management. 

Are you sure this other mother isn't pulling the old master-tenant switcharoo? (lease house, then lease to sub-tenants at a much higher rate)

halfshellmeijin

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #7 on: December 13, 2013, 08:54:23 AM »
So I probably went to the same collage and when I looked for housing I could not find something that expensive. Although to be fair I was looking for something on the opposite side of the price spectrum.

Forcus

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #8 on: December 13, 2013, 10:30:50 AM »
My only thought - buy rental houses in Lansing, MI.

CommonCents

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #9 on: December 13, 2013, 12:14:03 PM »
My 1 bedroom share of a 4 room apartment post college in a relatively cheap location in Boston was $725 in 2001.  Probably depends a lot on location...

halfshellmeijin

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #10 on: December 13, 2013, 04:20:52 PM »
My only thought - buy rental houses in Lansing, MI.

Which is a good thought, but my understanding is that in East Lansing (where Michigan State University is located) that you need a permit to rent, and they are all accounted for. Which also probably leads to the prices rising.

kendallf

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #11 on: December 13, 2013, 04:27:48 PM »
In rather random order, some replies:

This is MSU, and Lansing <> Boston for cost of living.  I stayed in an AirBnB home when we visited last year for $40/night, and looked at MLS listings in East Lansing; there were literally scores of houses for sale for <$25k. 

I am working to renovate a house for rental here in FL right now; if I had more cash or even felt comfortable taking on another mortgage, I'd be looking seriously to buy a house there and let her find roommates. 

I'm reasonably certain the lease agreement I received a copy of was genuine after doing some online research.  I too wonder about the legality of requiring essentially 5 months rent before the lease begins.  They're apparently able to get away with it.

Yes, the leases are individually severable and the apartment is furnished.  I'm familiar with these deals as my oldest daughter just finished her degree at FSU and spent several years living in complexes with similar (but more affordable!) arrangements.  Her most expensive apartment in Tallahassee, a town that has arguably more expensive real estate than Lansing, was $450/mo, with none of this crazy multiple months' rent due.

MrsPete

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #12 on: December 13, 2013, 04:52:38 PM »
Ever watch that show on HGTV about the guy who helps first-time landlords choose /fix up properties?  Scott McG-something.  He says that his first rental properties were student rentals, and they're his favorites -- they're the most profitable, and if the students don't pay, he can turn to their parental co-signers.  It's a good business, if you have the right skill set and are interested in being a landlord. 

My college daughter is looking for an apartment next year, and most of the apartment complexes use this same method you describe:  4 bedroom apartment, 4 girls sign 4 individual leases . . . so my daughter might actually be leasing Bedroom A, while her friend is leasing Bedroom B.  If you look at what each girl's paying x 4, it is just over 2K/month.   

However, we've decided to do it for several reasons:  When we compare her total apartment rent to her total dorm rent, it's about $800/year more.  This is to get her a private bedroom, access to a kitchen and living room, a bathroom shared with only one other girl, and a guaranteed parking space near her unit.  The unit comes with basic furniture and a washer/dryer.  These things will cost more than the dorm, but as a junior, she's ready for a little more privacy and space, and it's still a decent price. 

I do like the idea that if one girl drops out, gets sick and needs to go home, or whatever, my girl isn't on the hook for a portion of that girl's rent.  The apartment complex IS allowed to insert a new random roommate (must be female, must be non-smoking) into the room, but that's no a whole lot different from the dorms.

I had a problem once with a roommate in college, and it was very stressful for me:  The didn't much see the point in paying bills on time, and she would say she was fine with paying a late fee -- I wasn't. 

And a friend of mine's son is going through a problem right now:  A couple guys are sharing an apartment, and they were all giving their rent money to one of the roommates . . . who was putting it in his pocket.  He also made a point to get the mail every day, and he hid the notices from the apartment complex.  The guys -- being typical college guys -- didn't realize anything was wrong 'til they got the eviction notice.  My friend and the other parent "paid up" to prevent their sons from being out on the streets, and they're taking the other kid to court.  What a hassle. 

   


MicroRN

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #13 on: December 16, 2013, 03:11:32 PM »
Crazy!  Some friends and I rented a nice 4 bedroom, 3.5 bath, 3 story townhouse for $1000/mo.  W/D were included, as was landscaping, and it was on the bus route to the university.  I just went to check on those townhouses to see, since it's been 10 years, and they're now a whopping $1105/mo. 

Elaine

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #14 on: December 17, 2013, 07:29:19 AM »
My share of rent is $750... in New York City.

galliver

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #15 on: December 17, 2013, 09:02:43 AM »
I see this phenomenon in my college town. If you want to live in high-rises right by campus on the street with all the student-patronized bars, etc. the rents are like 800+/person/mo. There is no shortage of real estate here and my roomie and I are renting a 2.5 BR house with a fenced yard for $820/mo. W/D, dishwasher, trash, and internet(!) included. I think anyone who pays over $500/mo in this town is either (a) rich or (b) crazy.

dandarc

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #16 on: December 18, 2013, 05:10:02 PM »
That's seems awfully high for a bedroom.

Went to MSU ('06) myself.  I lived in the dorms for the first 3 years, then moved off campus and got a 2BR / 1BA half of a duplex with a garage for about $650.  Split that with a roommate initially, then just stayed there when I got my first post-college job at a local insurance company.

In January 2008 got a great offer to move to Tallahassee, where the rent is higher than in Lansing, at least in my experience.  The original landlord of the duplex in Lansing had sold to a bigger outfit somewhere along the way, and when I called offering $1,000 to break the lease, they flat out told me no, and said I could get out of it by finding someone to take over the lease.  A Craigslist ad offering my security deposit + $300 to take over the lease and a week later, I was on my way to Tallahassee, which has worked out fantastically.

Any way, about 3 months after signing over the lease in Lansing and moving to Tallahassee, I got a call from the property manager asking about the new tenant who apparently neither moved in nor paid a dime in rent.  Told the manager I did not know the guy or how to get in touch with him, while thinking "I bet my thousand dollars sounds pretty good right now".

<EDIT>The point of this story - the property manager that screwed themselves out of some money in this deal pretty much specialized in student rentals, at least until they bought out my prior land-lord.  I think they were used to being able to take advantage of students, most of whom do not have much experience in leases.  I would not be shocked if this place that wants $720 per bedroom is of a similar mindset.</EDIT>

If your daughter was thinking about a place anything like the new apartments that are springing up all over Tallahassee, it is probably a very nice place with lots of amenities.  That being said, $720 is a ridiculous amount to pay for a bedroom and a bathroom, even if all utilities and cable / internet are included.  I guess I could understand this if the place was right across the street from campus or something (the by the room complexes while I was there were quite a distance North of campus).  There are most definitely more affordable options in East Lansing, or nearby in Lansing - that duplex I had was fantastic and was only about 5 or 6 miles from campus.
« Last Edit: December 18, 2013, 05:27:27 PM by dandarc »

zinnie

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #17 on: December 18, 2013, 06:06:51 PM »
That is nuts for Lansing. That was my share of the rent in a 2-bed in San Francisco. In Champaign, IL I usually paid around $325!

It is also a bit odd that the mother is handling this--I bet if the roommates had to put up that kind of money upfront they'd be finding a very different place! :)

bostonmoney

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #18 on: December 27, 2013, 10:52:47 AM »
In Boston we paid about 39,000/year in rent for a 4 bedroom 2 bathroom unit that was legit roughly 1000 sqft.

I look back on it in disgust, but the thing is dorm housing was 1300-1400/month which is insane.  So my share of 812$/month was cheap.



I had the same group of friends through school, and with that group we needed two apartments (there was 8 of us total).  For the amount of money we spent living 4 years in the city at 40,000 x 2 apartment 80,000 a year x 4 years = $320,000 we would have owned half of any rental property we purchased in the area.  Makes me legit sick when I think about it now.

Then again, you would never enter that kind of financial commitment with someone you just met, but if only you knew how things turned out...



On a side note, Boston passed a nice little law during the time we were there limiting only 4 college aged people to be living in the same unit.  Pretty discriminatory if you ask me, not sure if its still enforced or not.  But it certainly didn't help the supply and demand aspect of cramming people into a larger place.  We would have done that if we could, share bedrooms and stuff.
« Last Edit: December 27, 2013, 10:54:55 AM by bostonmoney »

Zamboni

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #19 on: December 27, 2013, 03:04:09 PM »
^Not sure when you lived in Boston, but when I lived there it was quite common to have 2-3 students share a bedroom in an off campus apt.  My boyfriend lived in a corner of the living room (they strung up a sheet with some rope and nails to give him a "wall.")  It may well have been illegal.

One of my friends left town for the summer, continued to send checks for her share of the rent and utilities, which were in her name, and her roommate who stayed in the place all summer didn't pay any of the utilities the whole time.  So when she got back, the electricity and water had just been shut off.  Needless to say, that one got ugly . . .

Universities generally fleece the students who live on campus (outrageous housing fees per square foot, overpriced food.)  I guess the off campus folks have just moved up to the same table.

kendallf

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #20 on: December 27, 2013, 03:21:06 PM »
I'd agree the dorm costs are high per square foot/amenity.  The food costs actually work out pretty well if you use the dining halls exclusively.  My daughter ate out a handful of times last term, she came home for the holidays in top shape, and she wouldn't have time to cook the variety of food she gets at nearly any hour of the day or night.

It looks like she's going to stay in the dorms another year.  When we factor in things like transportation costs (she can forgo a car if she lives in the dorm; it might be a problem if she were in an apartment) the dorm costs look pretty good.  I should mention she's on a full scholarship so it's not actually my money going out of pocket, which makes it an easier decision.

RootofGood

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #21 on: December 27, 2013, 07:19:39 PM »
It looks like she's going to stay in the dorms another year.  When we factor in things like transportation costs (she can forgo a car if she lives in the dorm; it might be a problem if she were in an apartment) the dorm costs look pretty good.  I should mention she's on a full scholarship so it's not actually my money going out of pocket, which makes it an easier decision.

Thanks for the clarification, OP.  At first I was like "WTF, you just got placed on the hook for $700+ per month to rent a room??".  At least it isn't your money. 

I recall renting a 2 BR apartment with 3 other roommates (one was wife to be Mrs. RootofGood, we shared a room :) ).  It was like the dorms, except we had our own kitchen, living room, common area bathroom, and 1 full bath in each bedroom.  I think the rent was $700-ish about 10 years ago in Raleigh (no more expensive than Lansing I imagine).  Splitting the apartment costs 4 ways was nice because utilities were split 4x as well.  $10 electric bill, yessir!  $4 for basic cable, ok!  $7 for phone service, sure!  Everything else was included in the apartment rent.  Looks like the same units rent for $850 today according to Craigslist. 

I would definitely encourage my kids to look at something like what we did (sharing an apartment) instead of paying $$$$$ to share just 1 room.  Low cost independence, learning life's lessons while it's still cheap and all that. 


bostonmoney

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #22 on: January 02, 2014, 11:52:40 AM »
http://www.boston.com/realestate/news/articles/2008/03/13/students_face_caps_in_city_housing/?page=full

That is what happened the years I went to school.  No clue if it has changed back again... Not really a big deal but all the landlords were all nervous about getting fined.  Not sure how it is now.

Also as far as the dining hall went, it was far more.  The way it worked was basically every meal was the cost of dinner, so it was some outrageous amount for breakfast/lunch when you compare it to getting a sandwich/salad at Panera or a breakfast at the local pub (best places for breakfast btw... kegs & eggs!  and was super cheap)  Plus being in the city food deals are so easy to come by.  I can see being at a college where there's just the pizza place in the area... no options.

RootofGood

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #23 on: January 02, 2014, 02:08:23 PM »
Also as far as the dining hall went, it was far more.  The way it worked was basically every meal was the cost of dinner, so it was some outrageous amount for breakfast/lunch when you compare it to getting a sandwich/salad at Panera or a breakfast at the local pub (best places for breakfast btw... kegs & eggs!  and was super cheap)  Plus being in the city food deals are so easy to come by.  I can see being at a college where there's just the pizza place in the area... no options.

+1.  My first year when I was in the dorms, we had to purchase a meal plan.  I remember it worked out to something like $5.x or $6.x per meal depending on whether you bought the 12, 15, or 21 meal pass.  At the time, you could get better food off campus much cheaper.  $3-5 chinese lunch specials (from steamed vegs and rice to tofu/veg on lo mein (best I've ever had anywhere in the world) to a meat/veg combo with lo mein).  $4-5 mexican.  Or hit up fast food places for under $5.  This was back around 2000. 

Out of the other 6 guys in my suite that had meal plans, none ever used anywhere near the meals they paid for.  I signed up for the lowest number of meals, and had a hard time using them all, and occasionally let a meal or two go unused.  You were able to spend the entire meal cost of $6 or so at a university fast food restaurant or cafe, so I would often spend all the allotment at taco bell and get a big bag of food that would be lunch and then dinner or breakfast the next day.  Our dorm had a large shared kitchen facility on each floor (shared by 72 students).  I don't think I ever saw the kitchen being used more than 2-3x the entire year.  And we all had fridges/microwaves in our rooms, so cold storage of food wasn't an issue (if you took the beer out of the fridge). 

In a way I feel like the dorm life prepares kids for high consumption lifestyles later in life. To me it was a bit of a shock because I wasn't accustomed to dining outside the house all the time (maybe 1-2x month for a special occasion).  Oddly enough, the self-funded kids in my dorm suite didn't get the expensive meal plan, and tended to eat as well as us dining hall customers. 

clarkfan1979

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #24 on: February 26, 2014, 01:52:27 PM »
I rented a 5 bedroom house with 4 other roommates in San Diego in 2000 at the age of 21. North Pacific Beach area about 1.5 miles away from the beach. It was a 3 bedroom ranch and the landlord did a legal renovation changing the garage into two bedrooms (nice and legit bedrooms). The rent was $2900/month and so we all paid around $525-$600/month. Some bedrooms were bigger than others. In the backyard there were two legal studio apartments on top of one another for $650/month. That is $4200/month and he bought the property in 1988 for 280K. I started doing the math in my head and went to Barnes and Noble later than week and bought a bunch of books on being a landlord.

I just did a quick search on rental prices on craigslist and it looks like rooms go for about $750/month and studios go for $900/month. That's 5,550/month on a 280K mortgage. Yes it includes 26 years of appreciation, but holy crap batman!

Ms. Peachfuzz

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #25 on: February 26, 2014, 03:48:47 PM »
Those are some crazy numbers. I remember when I first started University (10 years ago) it was $1800 for 1/2 a dorm room and another $1600 for the meal plan for a grand total of $425 a month for the 8 months I was there. Just looked up the rates for that place these days and Holy Inflation Batman! The dorm is now $2800 and the meal plan $2900. That's $713 a month for half a bedroom, and a bathroom shared with 19 other people. Wow.

sheepstache

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #26 on: February 26, 2014, 04:19:05 PM »

In a way I feel like the dorm life prepares kids for high consumption lifestyles later in life. To me it was a bit of a shock because I wasn't accustomed to dining outside the house all the time (maybe 1-2x month for a special occasion). 

That's a good way to put it.  Traditionally we think of college as being a time when one lives cheaply, but most of my college friends couldn't have afforded the lifestyle they lived in college once they left.

Cwadda

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #27 on: February 26, 2014, 04:28:23 PM »
I am in college and faced this situation earlier. It was $3000/month. The plan was to have 4 people on the lease, but 5-6 living in it to cut down the costs per person. It didn't work out though.

Even my university's housing rates get outrageous once you go beyond a regular double.

coconutpop

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #28 on: February 28, 2014, 01:02:13 PM »
OMG what? I just calculate how much time I could live with 44 000 and it ended up being a bit less than 4 years. I am an extreme case tho. But still that is really expensive.

grantmeaname

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #29 on: February 28, 2014, 02:45:03 PM »
That's how long it would be for me and all my roommates too, and I live in a college house. I think OP's daughter's friend just found an exceptionally bad deal.

Apples

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #30 on: March 01, 2014, 06:21:01 AM »
I just graduated from MSU last year.  While houses for 5 I know ran anywhere from $350/$400 per person up to $600 or so in rent per person, $720 is well above and beyond.  I rented for $340ish but I was 3 miles south of campus and drove there-yes I know I could have biked, and I did in the summer with less traffic flow, but not during the school months.

ch12

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #31 on: March 01, 2014, 09:20:37 AM »
1) Buying a house in Lansing is a good idea
2) There has to be under the table renting if the disparity is that wide between what a house costs and how much rent costs

In college, one of my friend's friends had a house. His dad gave him the downpayment, and it was a 4-bedroom place. He had 3 of his friends rent a room. It worked out really well for him, and I know that he got a degree in Finance with a specialty in Real Estate. It's a good business learning opportunity, if you can get a permit (sounding unlikely if rents are THAT high).


jhartt3

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #32 on: March 05, 2014, 05:50:28 AM »
That is crazy. Four of us rented an awesome house obviously designed for college kids. (4 equally sized rooms walk in closets private sink shared toilet and shower with 1 other person.  Half bath for guests. Nice sized living room and kitchen. Cost 950 a month). We got together and each one of us cooked dinner for everyone one night a week Monday thru Thursday. 

We had just moved out of our fraternity house where rent including food was over 800 a month each and you shared a room. The alumni in charge of raising the rates claimed there was no way we could live for 400 each out of house because get this.  "My daughter spends 1k a month on food I know this because I pay the credit card bill". Way to teach your daughter nothing about personal finance and set her up to fail.

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #33 on: March 05, 2014, 12:55:38 PM »
A missing piece of this is that Lansing has a totally absurd ordinance prohibiting renting a house out without a license and capping the number of such licenses, so no new ones can be issued.  This basically makes the student rental market there artificially tight, and prevents new rentals coming on the market to bring down prices.

http://www.lansingstatejournal.com/interactive/article/20140215/NEWS01/302150018/Critics-take-East-Lansing-rental-ordinance-task

grantmeaname

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Re: College apartment rental? That'll be $44,400 for the year...
« Reply #34 on: March 05, 2014, 01:14:22 PM »
A missing piece of this is that Lansing has a totally absurd ordinance prohibiting renting a house out without a license and capping the number of such licenses, so no new ones can be issued.  This basically makes the student rental market there artificially tight, and prevents new rentals coming on the market to bring down prices.

http://www.lansingstatejournal.com/interactive/article/20140215/NEWS01/302150018/Critics-take-East-Lansing-rental-ordinance-task
"It's outrageous that college students want to live near me" - woman married to a college professor that lives three blocks from campus.

What a moron.